LATEST FROM THE STRATEGY SESSION
RSS FEED
- Spain to Go to Market to Fund Banks, Regions
- Home Prices Hit Fresh Lows, But 'We See Signs of Hope'
- JPMorgan Implicated in Japan's Insider Trading Probe
- Cramer's Top Dividend Plays
- Why June Could Be a Turning Point for Markets
- BlackBerry Maker RIM Hires Advisers to Review Business
- Facebook Faces Extended US Review of Instagram Deal
- Shares of Facebook Fall Below $29 for First Time
- High-Tech Worker Shortage: Has Anything Changed?
MOST SHARED
- Facebook Stock Falls Below $29 for First Time
- Stocks to Watch: RIMM, LULU, DAL & More
- Good News Ahead for the Euro?
- Home Prices Hit Lows, But 'We See Signs of Hope'
- How Gap Stores Turned Things Around
- Digital Generation Bottomed Out: Finerman
- Cramer’s One-on-One with Airgas CEO
- Your First Move For Wednesday May 30th
- Marubeni Buys Gavilon for $3.6 Billion as It Eyes China
- Lightning Round: Advance Auto Parts, Michael Kors, Pilgrim's and More
MOST POPULAR
HOT ON FACEBOOK
Netflix ‘Starting to Show Some Chinks’: Asset Manager
Text Size 
Web Producer, CNBC
Netflix is a high-growth name that is “starting to finally show some chinks,” Blake Bath, CEO of Bay Bridge Capital Management, a tech, media, telecom fund that typically invests in cash-rich companies, told CNBC Thursday.
 |
AP |
“We had been short
![[cnbc explains]](http://media.cnbc.com/i/CNBC/Sections/News_And_Analysis/_News/_CNBC_EXPLAINS/_IMAGES/CNBC_explains_icon1.gif)
the name, we’re not short it today, we still may be,” said Bath. “We think there’s more downside for this stock.”
Content costs for Netflix [NFLX
Loading...
()
] have tripled over the last six months, he added. “We think they only have one way to go, which is up [in content costs],” Bath said.
“Clearly Netflix has done a lot of things right in its 15-year history," he said. "The major benefit over the last three years has been the cheap content deals that they structured with folks like Starz.”
Since Netflix is “walking away” from the DVD-by-mail business, Bath pointed out that this leaves a “very nice gap for Coinstar's [
Loading...
()
] [Redbox]," which it acquired in a 2009 acquisition.
“Coinstar is a great candidate for private equity. We think it could generate $7 to $8 in free cash when they get back to normalized capital spending,” he said. “[It currently trades] at less then four times EBITDA. It's generating over $4 a share in free cash, even with the heavy investments they’ve been making,” Bath said.
Bay Bridge Capital has invested in Intel [INTC
Loading...
()
] and Google [GOOG
Loading...
()
], but also have a bunch of lesser-trafficked funds such as Seagate Technology [STX
Loading...
()
], Coinstar and Accenture [ACN
Loading...
()
].
Follow Strategy Session on Twitter: @CNBCStrategy
Follow David Faber on Twitter: @DavidFaberCNBC
 |
Watch CNBC's "The Strategy Session" weekdays at Noon ET.
- Companies that establish sustainable principles are positioned for long-term success, says this blogger.
- Advanced manufacturing is about customization, high-precision and performance. And it’s everywhere.
- Many veterans are turning to franchising as a way to make a living once they are out of the military.
- Have you ever wished you could just quit your job and follow your dream? These people have.
- Emerging-market bulls should look to Brazil, South Africa and Russia, as well as Thailand and South Korea.
- Some beers are better than others. An annual competition chose the ones that are the best.
Data is a real-time snapshot *Data is delayed at least 15 minutes
